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spk07: launched to almost 11,000. Since the premium channel was created in 2005, enabling doctors to collect an additional fee above and beyond standard reimbursement for advanced technology intraocular lenses, or ATIOLs, doctors and patients have been seeking a premium solution that consistently delivers excellent quality of vision without glasses. The LAL uniquely meets this challenge by letting doctors optimize a patient's vision after surgery to achieve excellent vision over a range of distances at rates that are nearly double that of competitive products, but without reducing quality of vision or increasing unwanted effects such as glare or halos. In the third quarter, we also rolled out an important update to our technology called ActiveShield. which protects the LAL from ambient UV light, providing additional scheduling flexibility for patients and doctors. We did see procedures grow throughout the quarter, and particularly in September, as our active shield rollout was substantially completed. While we are early in the fourth quarter, we have continued to see procedure momentum accelerate, and now expect revenue for the full year to be between $21 million to $21.4 million. The growing excitement around our excite is also evident in our ability to build out our U.S. commercial team efficiently and with very high quality. We have increased the LDD sales force to 14 above our previously stated goal of 12 by year end. We now expect our LDD sales force to be at 18 by the end of 2021. While this team is focused on developing new customers, we have also created a new LAL team sales team that is focused on rapid and expanded LAL utilization at RX site practices. This group currently includes five members and is expected to expand to 18 in the first half of 2022, which will bring our direct field sales team to 36 members by that time. With that, I'd like to turn it over to Shelly for more details on the third quarter financial results.
spk11: Thank you, Ron. Good afternoon, everyone. As Ron noted, total revenue in the third quarter was $5.8 million, an increase of 18% sequentially compared to the quarter ended June 30th, 2021, and 39% increase compared to the third quarter of 2020. Looking at revenue by product, we sold 31 LDD systems in the third quarter of 2021, generating $3.7 million in revenue compared to 25 LDDs driving $3 million of LDD revenue in the second quarter of 2021 and 19 in the third quarter of 2020 for $2.7 million in sales in the prior year period. As expected in our early stage of commercialization, LDDs continue to dominate the sales mix, representing 63% of our revenue in the third quarter and 61% in the second quarter of this year. We sold 1,977 LALs in the third quarter of 2021, generating revenue of $1.9 million compared to 1,825 LALs driving $1.8 million of LAL sales in the second quarter of 2021. and 1,513 LALs for $1.4 million of LAL revenue in the third quarter of 2020. Third quarter gross profit was $1.3 million or 23.2% of revenue compared to a gross loss of $800,000 in the second quarter ending June 30th, 2021 and a $720,000 gross profit in the third quarter of 2022 or 17.3% of revenue. The sequential increase in gross profit was primarily due to a large reserve in the second quarter of 2021 for our previous version of the LAL due to Active Shield LAL introduction. The increase in gross margin from the third quarter of 2020 is due to higher sales volume. Selling, general, and administrative expenses for the three months ended September 30th, 2021 were $9.1 million compared to $6.5 million for the three months ended June 30th, 2021 and $3.8 million in the same period of the prior year. The sequential increase in SG&A expenses in the third quarter of 2021 compared to the second quarter was primarily due to increased headcount in sales and marketing, increased costs to operate as a public company, and an increase in stock-based compensation. Research and development expenses for the three months ended September 30, 2021, were $5.4 million, compared to $6.6 million for the three months ended June 30, 2021, and $5.8 million in the same period of the prior year. The decrease in sales in research and development expenses sequentially and as compared to the prior period resulted from lower consumable materials for testing and prototype expense and lower clinical study expense. Our R&D costs can vary quarter to quarter depending on stage of development of products and timing of clinical studies. Our net loss in the third quarter was $12.7 million, or 68 cents per share, basic and diluted, attributable to common stock using a weighted average share count of 18.7 million shares. While we had a total of 27.4 million common shares outstanding at September 30th, EPS is calculated on a weighted average common shares outstanding during the quarter, with few common shares outstanding prior to our IPO on July 31st of this year. Prior to our IPO, most of our shareholders own preferred shares, which were converted to common shares immediately prior to the IPO. I would also like to highlight the non-GAAP disclosures in the press release for the non-cash stock-based compensation expense and the change in the fair value of warrants, as it provides investors with useful comparative information. Stock-based compensation in the third quarter of this year was $2 million, and the change in fair value of warrants resulted in a gain of $1.5 million in the quarter, resulting in a non-GAAP basic and diluted loss of $0.65 per share. Moving to the balance sheet, we ended the third quarter with $168.3 million in cash, cash equivalents, and short-term investments Long-term debt was $39.6 million. With the increase in momentum at the end of the third quarter and the beginning of this quarter, we expect revenue for the full year to be between $21 million to $21.4 million, an increase of 43% to 46% over the full year of 2020. Gross margin is expected to be between 18 and 19% with a net loss between $49 million to $50 million for the full year. Since we are at year end, this translates to revenue of $7.1 to $7.4 million in the fourth quarter, gross margin between 31 to 33%, and a net loss of $16 to $17 million for the fourth quarter. Now I will turn the call back to Ron for closing remarks.
spk07: Thank you, Shelley. To conclude our prepared remarks, our message to surgeons and patients is clear. The LAL system provides optimal visual outcomes for patients after cataract surgery. We are actively sharing the clinical data and best practices that define this value, including at the American Academy of Ophthalmology meeting in New Orleans, scheduled for November 12th through the 15th. With our growing number of implanting surgeons and installed base of LDDs, our expanding commercial capabilities, and the potential for additional product enhancements, we believe we are well positioned to execute on our opportunity to meet and exceed the progressively higher expectation of premium cataract patients and doctors. And now, operator, please open the call for questions.
spk08: Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone keypad. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Robbie Marcus from JP Morgan. Your line is now open.
spk02: Hey, guys. This is Alan on for Robbie. I just want to start by saying congrats on a good quarter. And, you know, I think it was a bit refreshing to not hear COVID-19 brought up as kind of an important dynamic to keep track of going forward. But just to dive a little bit deeper into it, was there any, you know, meaningful impact on the quarter from the pandemic and Delta? You mentioned that you saw acceleration continuing in through the quarter and into October, which is great to hear. But just in terms of the impact of the pandemic, you know, the kind of hospital staffing issues that we've heard of, any impact from those that we should keep in mind going forward?
spk07: Yeah, thank you for your question, Alan. You know, obviously COVID is still a factor at, you know, both the macro and practice level. And, you know, the rates for COVID did increase over the quarter, but ophthalmic practices largely have been relatively less affected by the primary effects of COVID and more from secondary effects, how people take vacations and staffing levels primarily at ASCs, which can limit the throughput of ASCs. So we certainly see COVID effects, but at our stage of development, we're still primarily impacted by factors related to our technology and our ramp.
spk02: Got it. And then just as a quick follow-up, I think in this quarter we saw you guys, you know, relative to our own forecast putting in, you know, a bit more LEDs than we had forecasted.
spk14: That really drove a little bit about performance versus our model.
spk02: So when we think about this momentum going forward, should we expect that fourth quarter will be driven by kind of another similarly strong quarter from LDD placements, especially, you know, with capital budgets generally seeing more purchasing at the end of the year and coupled with, you know, some more modest improvements in LALs as right now, as you've said, the focus really is on just expanding the base and then going deeper later. Thank you very much.
spk11: Hi, Alan. This is Shelly. You do have both those things right that you talked about. Our focus is on LDD sales because that does drive procedure growth. Fourth quarter historically has been strong for capital equipment for the same reasons that you enumerated earlier because people want to get their accelerated depreciation on any capital they buy in the fourth quarter. And fourth quarter tends to be good for procedures as well. That's a macroeconomic kind of look. I think it really depends on what our particular doctors decide to do for us, but we are very pleased with the momentum that we have on LDD sales.
spk08: Your next question comes from the line of Daniel Antalfi from SVB Learing. Your line is now open.
spk13: Hi, this is Erin on for Daniel. Thanks so much for taking your questions. I was just hoping, you know, thanks for providing guidance. I was just hoping you could maybe walk us through some of the assumptions included in, you know, the upper and lower ends of the range. and kind of what we can expect and what it might take to hit the lower and upper ends of the range. Thanks so much.
spk11: Yeah, the range is pretty narrow at 7.1 million to 7.4 million. I think the difference in the range will necessarily primarily be about the number of LDDs we sell during the quarter. And that really is also why we have some range in the gross margin as well because the gross margin on the LDD is lower, quite a bit lower than the LAL.
spk13: Okay, great. Thanks. And then just maybe if you could talk about what you're seeing in terms of, you know, utilization and how kind of new surgeons and, you know, once you place the LDD and how new surgeons are ramping, and how we should think about utilization heading into the fourth quarter and looking ahead into 2022.
spk07: Yeah, thank you, Erin. We see a wide range of initial utilization in RAMP. It really depends on the practice. And our Focus really is on educating the practices, and that includes doctors, optometrists, other people in the practice, about the value of the LAL and its unique ability to provide high-quality vision and an extended range of vision. And that's something that is just not – that combination is something that's just not available with other competitive products. And some practices pick up on that very early and ramp more quickly. Others, they take a little bit slower approach. Also, we do see that, and that's one of the reasons why we've initiated the new sales position focused on LAL sales and ramping is to be able to accelerate that educational process.
spk12: Okay, great. Thanks so much.
spk08: Your next question comes from the line of Ryan Zimmerman from BTIG. Your line is now open.
spk03: Hey, Ryan. Hey, Shelly. How's everyone doing? Congrats on the quarter.
spk09: Good afternoon.
spk10: Thank you, Ryan.
spk03: So first off, we'll see you guys in a few days at AEO. So I just want to ask a question on the increase in the LDD sales force. I guess what are you seeing in the account that's kind of accelerating that process? I think it's a good signal, but I would imagine there's something underlying that that's helping you think about that. And then, you know, certainly with the LAL rapid and expanded force that, you know, increases utilization. Also, my other question to that is, what do you expect, you know, when you put these people in place in terms of uptick and how fast that could start to generate kind of consistent LAL usage? Thank you.
spk07: Thank you, Ryan. Maybe I'll take the first part of that question and Shelley will take the second. You know, one factor in the rate of our hiring of sales folks is just the success that we've had in finding extremely qualified and interested people in joining RxSite. And so that's something that we've, you know, opportunistically taken advantage of to accelerate our hiring. Also, you know, we're obviously, this is a very large market, and there's an established pattern of relatively smaller territories within that where salespeople can really go deep into their territories and, again, educate the field on the benefits of RxSight technology. Again, that combination of quality and range of vision. So I would say those are the main factors in determining the pace of hiring.
spk11: And, of course, we just started hiring for our LAL sales team. We have five on now and expect to have 18 by the end of the second quarter. Again, we expect that pace to come up pretty quickly. You know, one of the things that we see in terms of adoption when you measure it, of course, is we're adding LDDs so rapidly, which is good. We're increasing the number per quarter. And, of course, it takes a while for people to get going. And we find that our clinical apps folks are really busy on training and training new doctors, as well as training new technicians, even in the ASC. So while they are very important and are in the practices all the time, we think we need the additional help with the LAL sales team. This is a relatively new team. They're just starting out. but we would expect that the efforts that they make on education about the product as well as patient flow in the practice and how to sell the product will be very important to us as we grow and get more and more LDDs. And of course it also allows us to go back to existing customers. Some are very high adopters and will be able to observe their best practices and and be able to let other people know about that as well, but also to help practices that maybe haven't adopted as quickly. So I think 2022 will tell us a bit more about the effectivity of that sales force, but we expect them to be effective, and we are hiring really very qualified people who've done it before for other companies.
spk03: Okay. That's very helpful. I appreciate that, Colleen. Just the last question for me, I'll hop back in queue. You know, your pricing on the LDDs came in, I think, higher than we were expecting, and certainly the LALs, you know, too. And I appreciate the comments about fourth quarter run, you know, into the quarter thus far and the momentum. What are your expectations around pricing? You know, do you expect it to be stable? And just how to think about pricing between the two components. Thanks for taking the question.
spk11: Yeah, as we think about pricing, you know, in the short run, that might be through the first half of 2022. We expect it to be stable, both for the LDD and the LAO.
spk01: Thank you.
spk08: Your next question comes from the line of Lawrence Michelson, but from Wells Fargo. Your line is now open.
spk04: Hi, this is Charles on for Larry. First, congrats on the next quarter. I know it's a little bit too early for any 2022 guidance, but I'd be curious to hear your thoughts. It looks like consensus is currently sitting at around 39 million in revenue or close to 86% yearly growth. Curious to hear your initial reactions to that number and just more generally, what might be driving the growth in the next year and the primary puts and takes in 2022? Thanks.
spk11: Of course, you know, as you did say that it is early for 2022 guidance. We're very focused on the fourth quarter right now. And we do see the macroeconomics continuing to improve a bit. You know, procedures are overall picking up. We do think that Our individual practice patterns are more important than the macroeconomics, but we're happy to see that. The other thing that other people have commented on is while we're getting some recovery from COVID, it's more gradual than I think everybody thought, and that will be limited really by ASC availability for surgeons to practice. And what we're really focused on as we get into, we're focused on it now, and it'll be the same focus in 2022, is one, LDD sales, two, increasing the number of LELs at each center, and that's our LEL sales force as well that we're growing. And really underpinning all that is education about the product and the benefits that we offer. There's no other product that compares to ours in terms of visual acuity as well as no glare, halos, and, of course, excellent contrast vision. So, Ron, I think, you know, you might want to talk about that just a little bit in terms of how we're positioning the product and what we're making sure we let people know about.
spk07: Yeah, I think you've done a great job. It's, you know, you hear... other products talking about their relative comparison to other premium IOLs that have either side effects or effects on visual quality. And that's simply not a factor with the LAL. And we're fully comparable to a conventional monopocal IOL in that regard. And so that is preservation of visual quality while still delivering range of vision. That's really the reason for the product, and it's the unique ability of the product due to its adjustability to achieve those results.
spk00: Thanks, guys.
spk08: Again, as a reminder, if you would like to ask a question, just press star 1 on your telephone keypad. Presenters, there are no more further questions at this time. Thank you, ladies and gentlemen. This concludes today's conference call. Thank you, everyone, for participating. You may now disconnect. Thank you. Thank you. you Thank you. Thank you.
spk06: Thank you. Thank you.
spk08: Good day and thank you for standing by. Welcome to our Excite 3rd Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Malcolm McLeod. Please go ahead, sir.
spk05: Thank you, operator. Presenting today are RxSight President and Chief Executive Officer Ron Kurtz and Chief Financial Officer Shelly Toonan. Earlier today, RxSight released financial results for the three months ended September 30, 2021. A copy of the press release is available on the company's website. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, November 10, 2021 only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, can be found in the press release. Please note that this conference call will be available for audio replay on our website at rxsite.com on the investor calendar page and the news and events section on our investor relations page. With that, I will turn the call over to CEO Ron Kurtz.
spk07: Thank you, Malcolm, and good afternoon, everyone. I'll begin today's call with a brief overview of the quarter along with some general observations. Shelley, tune in. We'll then go into more of the financial details, and we'll then take questions. In the third quarter, our light delivery device and light adjustable lens sales generated $5.8 million in revenue, representing 39% growth compared to Q3 2020 and 18% growth compared to the second quarter of this year. For the nine months ended September 30th, 2021, revenue was $14.2 million, representing a 45% increase compared to the same period in 2020. With the addition of 31 light delivery devices, or LDDs, our installed base grew to 161 by the end of the quarter, while ophthalmic surgeons also implanted 1,977 light-adjustable lenses, or RXLALs, during the quarter, bringing the total since our U.S. commercial launch to almost 11,000. Since the premium channel was created in 2005, enabling doctors to collect an additional fee above and beyond standard reimbursement for advanced technology intraocular lenses, or ATIOLs, doctors and patients have been seeking a premium solution that consistently delivers excellent quality of vision without glasses. The LAL uniquely meets this challenge by letting doctors optimize a patient's vision after surgery to achieve excellent vision over a range of distances and at rates that are nearly double that of competitive products, but without reducing quality of vision or increasing unwanted effects such as glare or halos. In the third quarter, we also rolled out an important update to our technology called Active Shield, which protects the LAL from ambient UV light, providing additional scheduling flexibility for patients and doctors. We did see procedures grow throughout the quarter and particularly in September as our active SHIELD rollout was substantially completed. While we are early in the fourth quarter, we have continued to see procedure momentum accelerate and now expect revenue for the full year to be between $21 million to $21.4 million. The growing excitement around RxSight is also evident in our ability to build out our U.S. commercial team efficiently and with very high quality. We have increased the LDD sales force to 14 above our previously stated goal of 12 by year end. We now expect our LDD sales force to be at 18 by the end of 2021. While this team is focused on developing new customers, we have also created a new LAL team sales team that is focused on rapid and expanded LAL utilization at RxSite practices. This group currently includes five members and is expected to expand to 18 in the first half of 2022, which will bring our direct field sales team to 36 members by that time. With that, I'd like to turn it over to Shelly for more details on the third quarter financial results.
spk11: Thank you, Ron. Good afternoon, everyone. As Ron noted, total revenue in the third quarter was $5.8 million, an increase of 18% sequentially compared to the quarter ended June 30th, 2021, and 39% increase compared to the third quarter of 2020. Looking at revenue by product, we sold 31 LDD systems in the third quarter of 2021, generating $3.7 million in revenue compared to 25 LDDs driving $3 million of LDD revenue in the second quarter of 2021 and 19 in the third quarter of 2020 for $2.7 million in sales in the prior year period. As expected in our early stage of commercialization, LDDs continue to dominate the sales mix, representing 63% of our revenue in the third quarter and 61% in the second quarter of this year. We sold 1,977 LALs in the third quarter of 2021, generating revenue of $1.9 million compared to 1,825 LALs driving $1.8 million of LAL sales in the second quarter of 2021 and 1,513 LALs for $1.4 million of LAO revenue in the third quarter of 2020. Third quarter gross profit was $1.3 million or 23.2% of revenue compared to a gross loss of $800,000 in the second quarter ending June 30th, 2021 and a $720,000 gross profit in the third quarter of 2022 or 17.3% of revenue. The sequential increase in gross profit was primarily due to a large reserve in the second quarter of 2021 for our previous version of the LAL due to Active Shield LAL introduction. The increase in gross margin from the third quarter of 2020 is due to higher sales volume. Selling, general, and administrative expenses for the three months ended September 30th, with $9.1 million compared to $6.5 million for the three months ended June 30th, 2021, and $3.8 million in the same period of the prior year. The sequential increase in SG&A expenses in the third quarter of 2021 compared to the second quarter was primarily due to increased headcount in sales and marketing, increased costs to operate as a public company, and an increase in stock-based compensation. Research and development expenses for the three months ended September 30th, 2021 were $5.4 million compared to $6.6 million for the three months ended June 30th, 2021 and $5.8 million in the same period of the prior year. The decrease in sales in research and development expenses sequentially and as compared to the prior period resulted from lower consumable materials for testing and prototype expense and lower clinical study expense. Our R&D costs can vary quarter to quarter depending on stage of development of products and timing of clinical studies. Our net loss in the third quarter was $12.7 million, or 68 cents per share, basic and diluted, attributable to common stock using a weighted average share count of 18.7 million shares. While we had a total of 27.4 million common shares outstanding at September 30th, EPS is calculated on a weighted average common shares outstanding during the quarter, with few common shares outstanding prior to our IPO on July 31st of this year. Prior to our IPO, most of our shareholders' own preferred shares which were converted to common shares immediately prior to the IPO. I would also like to highlight the non-GAAP disclosures in the press release for the non-cash stock-based compensation expense and the change in the fair value of warrants, as it provides investors with useful comparative information. Stock-based compensation in the third quarter of this year was $2 million. And the change in fair value of warrants resulted in a gain of $1.5 million in the quarter, resulting in a non-GAAP basic and diluted loss of 65 cents per share. Moving to the balance sheet, we ended the third quarter with $168.3 million in cash, cash equivalents, and short-term investments. Long-term debt was $39.6 million. With the increase in momentum at the end of the third quarter and the beginning of this quarter, we expect revenue for the full year to be between $21 million to $21.4 million, an increase of 43% to 46% over the full year of 2020. Gross margin is expected to be between 18% and 19%, with a net loss between $49 million to $50 million for the full year. Since we are at year end, this translates to revenue of $7.1 to $7.4 million in the fourth quarter, gross margin between 31 to 33%, and a net loss of $16 to $17 million for the fourth quarter. Now I will turn the call back to Ron for closing remarks.
spk07: Thank you, Shelley. To conclude our prepared remarks, our message to surgeons and patients is clear. The LAL system provides optimal visual outcomes for patients after cataract surgery. We are actively sharing the clinical data and best practices that define this value, including at the American Academy of Ophthalmology meeting in New Orleans scheduled for November 12th through the 15th. With our growing number of implanting surgeons and installed base of LDDs, our expanding commercial capabilities, and the potential for additional product enhancements, we believe we are well positioned to execute on our opportunity to meet and exceed the progressively higher expectation of premium cataract patients and doctors. And now, operator, please open the call for questions.
spk08: Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone keypad. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Robbie Marcus from JP Morgan. Your line is now open.
spk02: Hey, guys. This is Alan on for Robbie. I just want to start by saying congrats on a good quarter. And, you know, I think it was a bit refreshing to not hear COVID-19 brought up as kind of an important dynamic that you've tracked going forward. But just to dive a little bit deeper into it, was there any, you know, meaningful impact on the quarter from the pandemic and Delta? You mentioned that you saw acceleration continuing in through the quarter and into October, which is great to hear. But just in terms of the impact of the pandemic, you know, the kind of hospital staffing issues that we've heard of, any impact from those that we should keep in mind going forward?
spk07: Thank you for your question, Alan. Obviously, COVID is still a factor at both the macro and practice level. The rates for COVID did increase over the quarter, but ophthalmic practices largely have been relatively less affected by the primary effects of COVID and more from secondary effects, how people take vacations and staffing levels primarily at ASCs, which can limit the throughput of ASCs. So we certainly see COVID effects, but at our stage of development, we're still primarily impacted by factors related to our technology and our ramp.
spk02: Got it. And then just as a quick follow-up, I think in this quarter we saw you guys, you know, relative to our own forecast putting in, you know, a bit more LEDs than we had forecasted.
spk14: That really drove a little bit about performance versus our models.
spk02: So when we think about this momentum going forward, should we expect that fourth quarter will be driven by kind of another similarly strong quarter from LDD placements, especially, you know, with capital budgets generally seeing more purchasing at the end of the year and coupled with, you know, some more modest improvements in LALs as right now, as you've said, the focus really is on just expanding the base and then going deeper later. Thank you very much.
spk11: Hi, Alan. This is Shelly. You do have both those things right that you talked about. Our focus is on LDD sales because that does drive procedure growth. Fourth quarter historically has been strong for capital equipment for the same reasons that you enumerated earlier because people want to get their accelerated depreciation on any capital they buy in the fourth quarter. And fourth quarter tends to be good for procedures as well. That's a macroeconomic kind of look. I think it really depends on what our particular doctors decide to do for us, but we are very pleased with the momentum that we have on LDD sales.
spk08: Your next question comes from the line of Daniel Antalfi from SVB Learing. Your line is now open.
spk13: Hi, this is Erin on for Daniel. Thanks so much for taking your questions. I was just hoping, you know, thanks for providing guidance. I was just hoping you could maybe walk us through some of the assumptions included in, you know, the upper and lower ends of the range. and kind of what we can expect and what it might take to hit the lower and upper ends of the range. Thanks so much.
spk11: Yeah, the range is pretty narrow at 7.1 million to 7.4 million. I think the difference in the range will necessarily primarily be about the number of LDDs we sell during the quarter. And that really is also why we have some range in the gross margin as well because the gross margin on the LDD is lower, quite a bit lower than the LAL.
spk13: Okay, great. Thanks. And then just maybe if you could talk about what you're seeing in terms of, you know, utilization and how kind of new surgeons and, you know, once you place the LDD and how new surgeons are ramping and how we should think about utilization heading into the fourth quarter and, you know, looking ahead into 2022.
spk07: Yeah, thank you, Erin. You know, we see a wide range of initial utilization in RAMP. It really depends on the practice. And our Focus really is on educating the practices, and that includes doctors, optometrists, other people in the practice, about the value of the LAL and its unique ability to provide high-quality vision and an extended range of vision. And that's something that is just not – that combination is something that's just not available with other competitive products. And some practices pick up on that very early and ramp more quickly. Others, they take a little bit slower approach. Also, we do see that, and that's one of the reasons why we've initiated the new sales position focused on LAL sales and ramping is to be able to accelerate that educational process.
spk12: Okay, great. Thanks so much.
spk08: Your next question comes from the line of Ryan Zimmerman from BTIG. Your line is now open.
spk03: Hey, Ron. Hey, Shelly. How's everyone doing? Congrats on the quarter.
spk09: Good afternoon. Thank you, Ryan.
spk03: So, well, first off, we'll see you guys in a few days at AEO. So I just want to ask a question on the increase in the LDD sales force. I guess what are you seeing in the accounts that, you know, kind of accelerating that process? I think it's a good signal, but I would imagine, you know, there's something underlying that that's helping you think about that. And then, you know, certainly with the LAL rapid and expanded force that, you know, increases utilization. Also, my other question to that is, what do you expect, you know, when you put these people in place in terms of uptick and how fast that could start to generate kind of consistent LAL usage? Thank you.
spk07: Thank you, Ryan. Maybe I'll take the first part of that question and Shelley will take the second. You know, one factor in the rate of our hiring of sales folks is just the success that we've had in finding extremely qualified and interested people in joining RxSite. And so that's something that we've, you know, opportunistically taken advantage of to accelerate our hiring. Also, you know, we're obviously, this is a very large market, and there's an established pattern of relatively smaller territories within that where salespeople can really go deep into their territories and, again, educate the field on the benefits of RxSight technology. Again, that combination of quality and range of vision. So I would say those are the main factors in determining the pace of hiring.
spk11: And, of course, we just started hiring for our LAL sales team. We have five on now and expect to have 18 by the end of the second quarter. Again, we expect that pace to come up pretty quickly. You know, one of the things that we see in terms of adoption when you measure it, of course, is we're adding LDDs so rapidly, which is good. We're increasing the number per quarter. And, of course, you know, it takes a while for people to get going. And we find that our clinical apps folks are really busy on training and training new doctors, as well as training new technicians, even in the ASC. So while they are very important and are in the practices all the time, we think we need the additional help with the LAL sales team. This is a relatively new team. They're just starting out. But we would expect that the efforts that they make on education about the product as well as patient flow in the practice and how to sell the product will be very important to us as we grow and get more and more LDDs. And, of course, it also allows us to go back to existing customers. Some are very high adopters and, you know, will be able to observe their best practices and be able to let other people know about that as well, but also to help practices maybe haven't adopted as quickly. So I think 2022 will tell us a bit more about the effectivity of that sales force, but we expect them to be effective, and we are hiring really very qualified people who've done it before for other companies.
spk03: Okay. That's very helpful. I appreciate that, Colleen. Just the last question for me, I'll hop back in queue. You know, your pricing on the LDDs came in, I think, higher than we were expecting. And certainly the LALs, you know, too. And I appreciate the comments about fourth quarter run, you know, into the quarter thus far and the momentum. What are your expectations around pricing? You know, do you expect it to be stable? And just how to think about pricing between the two components. Thanks for taking the question.
spk11: Yeah, as we think about pricing, you know, in the short run, that might be through the first half of 2022. We expect it to be stable, both for the LDD and the LAO.
spk01: Thank you.
spk08: Your next question comes from the line of Lawrence Bagelson, but from Wells Fargo. Your line is now open.
spk04: Hi, this is Charles on for Larry. First, congrats on the next quarter. I know it's a little bit too early for any 2022 guidance, but I'd be curious to hear your thoughts. It looks like consensus is currently sitting at around 39 million in revenue or close to 86% yearly growth. Curious to hear your initial reactions to that number and Just more generally, what might be driving the growth in the next year in the primary puts and takes in 2022? Thanks.
spk11: Of course, you know, as you did say that it is early for 2022 guidance. We're very focused on the fourth quarter right now. And we do see the macroeconomics continuing to improve a bit. You know, procedures are overall picking up. We do think that Our individual practice patterns are more important than the macroeconomics, but we're happy to see that. The other thing that other people have commented on is while we're getting some recovery from COVID, it's more gradual than I think everybody thought, and that will be limited really by ASC availability for surgeons to practice. And what we're really focused on as we get into, we're focused on it now, and it'll be the same focus in 2022, is one, LDD sales, two, increasing the number of LALs at each center, and that's our LAL sales force as well that we're growing. And really underpinning all that is education about the product and the benefits that we offer. There's no other product that compares to ours in terms of visual acuity as well as no glare, halos, and, of course, excellent contrast vision. So, Ron, I think, you know, you might want to talk about that just a little bit in terms of how we're positioning the product and what we're making sure we let people know about.
spk07: Yeah, I think you've done a great job. You know, you hear... other products talking about their relative comparison to other premium IOLs that have either side effects or effects on visual quality. And that's simply not a factor with the LAL. And we're fully comparable to a conventional monopocal IOL in that regard. And so that is preservation of visual quality while still delivering range of vision. That's really the reason for the product, and it's the unique ability of the product due to its adjustability to achieve those results.
spk00: Thanks, guys.
spk08: Again, as a reminder, if you would like to ask a question, just press star 1 on your telephone keypad. Presenters, there are no more further questions at this time. Thank you, ladies and gentlemen. This concludes today's conference call. Thank you, everyone, for participating. You may now disconnect.
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